How Magazines Led Investors Toward Ruin

n December, Fortune magazine admitted it had been remiss naming insurance giant AIG one of its “10 Stocks To Buy Now” before a yearlong 18 percent decline. “We… didn’t expect [the] mortgage unit to be such an albatross,” editors wrote. To correct the error, the magazine had a fresh list of “The Best Stocks For 2008” — including Merrill Lynch. “Smart investors should buy this stock before everyone else comes to their senses,” Fortune wrote, calling a recent correction in Merrill stock “an overreaction.” Investors who followed this advice are now down 93 percent. All the big financial magazines butter their bread with dubious prescriptions for how hobbyist investors can beat market professionals, so Fortune is hardly alone in being humiliated by the ongoing market meltdown.